Layaway Making A Comeback

By cwaltersNovember 9, 2009

Sears and Toys R Us are among retailers who have brought back layaway programs to help boost sales, reports Eve Mitchell at the San Jose Mercury News. Not all stores think it’s worth the effort, so you won’t find it at JCPenney, Target, or Walmart. However, if you want to use layaway at retailers that don’t offer it, there are now websites that can help.

Consumer electronics, appliances, toys and games are sold at http://www.lay-away.com, which charges no service fees to consumers because revenues come from sales commissions paid by retailers. A $35 fee applies on canceled orders.

Consumers who go to http://www.elayaway.com are charged a 1.9 percent transaction fee on merchandise purchased from retail partners that include Apple, Bass Pro Shops, Best Buy and Home Depot. Cancellation fees are $25, or 10 percent of the cost of the merchandise, whichever is less.

I can’t recommend either site without knowing more about how well they work, but a quick comparison of a Nintendo DS Lite at eLayaway.com showed one available from Best Buy for $129, the same price being offered on the official Best Buy site. As always, read the fine print and make sure that any hidden costs aren’t being bundled into the total price.

I was sad to see layaway go the way of the dinosaurs several years ago. As a mother of a young and inquisitive child with very little closet space to spare, being able to outsource the problem of hiding Christmas presents was well worth the fuss. (Now, of course, her presents fit in shoeboxes and I can hide them in plain sight without her ever noticing, just in time for the comeback.)

Wasn’t it just a few months ago that everyone was bemoaning the loss of layaway? Funny how it’s brought back almost immediately. I’m sure there are a ton of people who are going to put it down and harp on “DON’T BUY IT UNLESS YOU HAVE ALL THE MONIES!”, but it is a great service for the poor and working-class.

@squinko: What are you talking about? You don’t receive the lay-away item until you have paid all the monies, usually in installments. It’s more or less the same thing as saving up to buy something, instead of putting money aside, you put it toward something.

@squinko: Hypnotik_jello, aside from having a gloriously accurate handle, is correct. The only caution one might put forward is “don’t put too much on layaway” for the fact that you wouldn’t want to get nailed by fees if you decide your can’t follow through.

@squinko: But at the same time (and I don’t necessarily think this is classicism) whether you’re poor or middle class, f you don’t need to buy it immediately to secure a sale price (pi does make a good point), I think a better option is to open a special Christmas savings account. Estimate how much you’ll be spending on gifts or price them out, divide the total by the number of weeks you have left to purchase them, add that amount in each week – at least you’re earning interest.
I used to work for a local bank that had a promo program like this. At the beginning of the year you signed up for a passbook savings account with a great interest rate. You can choose to make a deposit each week or auto deposit a certain amount based on how much you want to have in the account by December 1st. The only problem with this and benefit to layaway is that some people don’t have the self control or memory to keep putting money in the account, whereas layaway is a bit easier.

I like layaway and see it as another form of goal-oriented savings. It’s obviously not for anything that will be obsolete, out of fashion, or out of season by the time you redeem it, but it’s an excellent alternative to credit cards.

I wish my dentist operated on layaway. In the meantime I have a crappy medical savings account through work that does not let you pay with the money in your account, it allows you to reimburse yourself with the money instead. Which means they take my cash up front and then expect me to have it later, on the spot, for my medical needs, and then apply to reimburse myself. Quel stupide.

K-mart also brought back the “Christmas Club”, where you deposit some money each week and then use it to buy gifts. Unlike a bank, they give you a gift card, and instead of interest they give you an extra couple percent.

@riroon: I know that I’ve seen commercials where they do “Ship to Store” for the holidays so you can order the item from a wider online selection and have it shipped to a store near you for no charge. Although, at the bottom it says “Some restrictions apply”.

I am glad companies are bringing it back, but until walmart, target, and meijers bring it back, it just means I have to shop at kmart.

I would think more retailers would bring it back. I understand if the problem lies with lack so space to store items, but that could be overcome with a registry like system (reimbursing for items that are sold out when you go to pay off the balance). And if restocking items on canceling orders is the reason for doing away with layways, then maybe they need to raise the cancellation fees.

Wow, what memories. Lay-away! Back when I was newly-married and we weren’t earning much, we bought things on lay-away all the time. Of course, that was back when Ames was still in town and there were Caldor’s still in the area, both of these chains were pretty strong on lay-away and made it very easy. Both of those chains have, since then, gone the way of the dodo.

I also have no idea how these newfangled e-layaway services work, but the way it used to be was great. If the Sears and Toys Ð¯ Us programs are the same as they used to be*, it’s a fabulous way to buy things without having to go into debt.

Lastly, every christmas walmart stores ended up with trailer upon trailer of merchandise put on hold for people that either canceled at the last minute or returned it just after christmas. 90% of the things people wanted to walk in and buy had already been stuffed on reserve by someone else. Things have been much easier without layaway.

Oooh, layaways. That does bring back good memories. I remember the summer prior to my senior year of high school, when I’d worked full-time at Piggly Wiggly (don’t laugh, it was rural South Carolina), and I’d put a ton of fall clothes on layaway at K-Mart (don’t laugh, it was rural South Carolina).

I felt so damn proud of myself when I walked out of the store the day before classes began, loaded down with pastel sweaters and cute jeans. Layaways were a tremendous help to those of us who needed a little extra support in managing/saving money.

My parents used lay-away as a teaching aid… We had an Ames in town when I was young. If I wanted a toy or something special, mom would go with me to put it on lay-away (they usually had her co-sign on it) and then pay one a week or so with my hard earned allowance. I hope its around so I can use it to teach my kids about goal oriented savings too. It was pretty exciting to make the last payment and get my awesome toy or whatever to take home.

I work for a company that offers layaway. While it’s not ideal for many people, for those without credit options, it’s a great alternative. Sure, you could simply save up the cash on your own and then make the purchase, but it’s a great budgeting tool if you want to make responsible purchases within your means.

What’s really sad is when people put necessities on layaway – we see it all the time. It’s one thing to see a tv or a Wii on layaway, but when you see baby clothes, underwear and socks on layaway it can break your heart. Last year, customers all over the country started coming in and paying off some of these layaway bundles set aside by others that consisted of staples rather than luxuries. When the layaway customer would come in to make a payment, they would find that their purchase had been paid for by a stranger. Some customers would leave a note and others wouldn’t, but all remained anonymous. Say what you will about layway, I think that’s pretty cool.

@kexline: Apparently it started with a man going into a store in California and asking the manager to see the layaway purchases. They’re kept in clear plastic bags, so you can get a pretty good idea of what’s in them. He spent about $1000 paying of the purchases of multiple customers. The only reason he gave was that he had grown up in the town, and he wanted to give back. I know it might sound apocryphal, but the email from the original store manager circulted in the company internally, so it seems to be true.

After that initial story made the rounds, the media picked up on it and we started getting reports from all over the place. One purchase was paid off, but the customer never picked it up and their phone was disconnected. A store manager delivered it by hand to the address the customer had left and needless to say they were very grateful.

It seems like with all the stories I’ve seen, people have just eyeballed the purchases and picked the one that looked the most in need of help. We’re expecting more stories this year, but as far as I know there hasn’t been a formal process put in place to match donors with purchases (I’m not in the stores, so I’m not sure).

The problem with layaway is that at least in the store I used to work at, the merchandise would either get lost, or people wouldn’t pay or they would come in days later with their payment, and we couldn’t process it because it was late. Not to mention people cancelling and then being stuck with a lot of merchandise that has already gone on clearance.

Those hot toys you had reserved for your kids for Xmas, they would mysteriously disappear and could not be found when you went to pick up your stuff. Your stuff was also stored in nothing but a big plastic bag, so things were often damaged.

When I first got out of college, I used lay-away all the time. Then I got a credit card.

Unless the fees are WAY lower than your current credit card rates, it doesn’t add up. Even if your annual rate is 18%, if you pay the balance off in a month, you only pay about 1.4% on the money. While I understand the upside of helping consumers think through their purchases at the source, the cancellation fees are too risky for me. ( [www.experiglot.com] )

I think the whole lay-away “movement” might be a sneaky way for retailers to add an extra month to the Christmas shopping cycle and still come away looking like the “good guys”.

I love layaway for big items. It reminds me to not spend money during those few weeks I’m paying for something that I really want. Somehow with the instant gratification of a credit card purchase, I forget that I’m paying for that item for weeks afterward, and I just keep spending.

Not to be snide or anything, but how old are you? I did my k-6 in the ’60s, and only dimly remember the whole idea of “school clothes”; in fact, by the time I’d reached fifth or sixth grade, jeans, sneakers and t-shirts had become acceptable in public school (at least for boys). By the time I started high school, circa 1971, the whole idea of clothes specifically for school had pretty much gone out the window, as both boys and girls were showing up in jeans, t-shirts, sneakers, and old army jackets.

@flugennock: I was a child of the 1970’s (started 1st grade in 1977), and had school clothes. For everyday playing, I had jeans and T-shirts, but when I went to school, at least for the younger grades, I would wear a polo shirt, or a plaid button down shirt (yes my mother dressed me funny), or sometimes a dressy t-shirt, and a newer pair of jeans or slacks. I also wor my newer shoes.

When I cam home from school, I would put on my “play shoes” (basically the last pair of scool shoes that Mom didn’t care if I got dirty) and change into an older pair of pants and a more casual T-shirt.

As I got older, and was less likely to ruin clothes while playing, the concept of school clothes went away.

@pecan 3.14159265 @flugennock: Yes, that’s what I meant. The new clothes you get for the new year that aren’t already ruined and grown out of. That’s the reason stores have “back to school sales” that including CLOTHING.

I’m with you, I think the idea of lawaway is good but there are charges related and it would be better to just save up for an item. What we do – anything we can’t pay for with cash out of our checking account, gets put on a wish list, then we talk about it, pick our top items and start savings accounts (ING sub accounts) for same.

For Christmas, we put $50 aside every pay period, come Christmas time we have $1,000+ budgeted for gifts, cards, etc. We don’t spend more than our budgeted amount.

@pecan 3.14159265: I once got detention for wearing pulled up knee socks that were not quite the right shade of navy blue. It turned out they were the navy blue preferred by my SISTER’S local parochial school, whereas my prep school has a slightly different shade of navy blue.